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SASKATCHEWAN — The pre-feasibility study of the Star kimberlite, 60 km east of Prince Albert, estimates probable reserves to be 171 million tonnes at a grade of 12.0 carats per hundred tonnes (cpht). From another angle, there are 20.0 million carats worth $265/ct to be mined. The study covers the Star diamond project (100%-owned by Shore Gold of Saskatoon) and Star West, the portion of the kimberlite that falls in the FALC joint venture (60% Shore and 40% Newmont Mining Corp. of Canada). P&E Mining Consultants prepared the report.

The pre-feasibility study anticipates that 20.0 million ct would be mined over a 12-year total mine life. Pre-production capital costs would run to $1.5 billion, with a total capital cost of $1.6 billion. The initial payback period would be only 5.2 years. The study also concludes that the project has a pre-tax base case net present value (NPV) of $474 million for an internal rate of return (IRR) of 12% and an after-tax NPV of $291 million with an IRR of 10%.

If the project receives corporate approval in March 2010, the projected startup of the open pit mine would be Q2 2014. The processing plant would treat 40,000 t/d of ore. Mining costs are estimated to be $6.29/tonne of ore and processing costs would be $3.29/tonne.

Details from the pre-feasibility study are posted in the news release of Aug. 27, 2009, at the Shore website, www.ShoreGold.com.